Social Impact Bonds as a Tool for Social Impact Investment

Despite the rapid economic and technological transformations experienced today, all countries are faced with many social and environmental problems. With financial globalization, temporary or permanent crises in an economy affect other economies through cross-contamination and push governments to make serious budget cuts in the field of social spending. In this context, it is inevitable for governments to reconsider the way of financing social policies. The important role the finance industry plays in sustainable development and creating shared value for society has developed innovative and alternative funding approaches. In this context, social impact investments are a new concept that aims to integrate the positive social or environmental impact into the financial return of capital. One of the new techniques used in financing social impact investment is social impact bond programs. This chapter aims to provide information about social impact bonds and discuss the potential application of SIBs in Turkey.